More On Legal & Compliancefrom The Advisor's Professional Library
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
In the eye of the storm as Americans pick up the pieces of their retirement savings is one regulator—and one of AdvisorOne’s 50 Top Women in Wealth—who is using bold strokes to help investors make the most of their retirement savings.
The Assistant Secretary of Labor of the Employee Benefits Security Administration (EBSA), Phyllis C. Borzi (left), will require transparency on costs to retirement plan sponsors and the participants who are captive in those plans. This is important because an additional 1% in fees can cost an investor dearly, resulting in a 28% reduction in retirement savings over a 35-year period, according to the Department of Labor (DOL). It difference reduces the growth of a $25,000 initial investment from $227,000 to $163,000—a very “substantial” difference.
Borzi has also proposed to broaden the scope of which advisors must act as fiduciaries under ERISA. Because advisors to retirement plans often recommend to the plan sponsors—who are fiduciaries to the plan and its participants—which investment choices to place in a retirement plan, this is a critically important issue to investors. The advisors sometimes also advise participants about what to choose inside their retirement plan account, their IRAs and what to invest in when they take money out of those plans.
In addition, Borzi has proposed rules to “enhance target date fund disclosures.”
Health care also falls into Borzi’s bailiwick, and she has been active in implementing the Patient Protection and Affordable Care Act, issuing “guidance” and “interim procedures,” according to the DOL.
Before her confirmation to the Department of Labor in mid 2009, Borzi was a research professor at GeorgeWashington University Medical Center’s School of Public Health and Health Services and of counsel on ERISA and employee benefit matters to O’Donoghue & O’Donoghue LLP, a law firm in Washington, according to the DOL.
Over a long career specializing in pension and employee benefits law, Borzi has been counsel for the U.S. House of Representatives, Subcommittee on Labor-Management Relations of the Committee on Education and Labor. She is a charter member, was a board member and was president of the American College of Employee Benefit Counsel, was co-chair and a member of the Advisory Board of the BNA Pension & Benefits Reporter and was a member of the Advisory Committee of the Pension Benefit Guaranty Corporation. Borzi was also a member of the Advisory Board of the Pension Research Council, The Wharton School, The University of Pennsylvania and was a board member of the Women’s Institute for a Secure Retirement (WISER).
Borzi holds a Syracuse University MA in English and a JD from Catholic University Law School.